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Ford Consumer Finance Co. v. Fidelity National Title Co.

May 12, 1997


Appeal from Superior Court of King County. Docket No: 95-2-17934-7. Date filed: 12/05/95. Judge signing: Hon. James W. Bates Jr.

Authored by Ronald E. Cox. Concurring: Susan R. Agid, Ann L. Ellington.

The opinion of the court was delivered by: Cox

COX, J. -- Seattle-First National Bank (Seafirst) appeals a summary judgment order in favor of Ford Consumer Finance Co., Inc., that ruled that Ford was entitled to certain proceeds. The proceeds were generated by the refinancing of a loan evidenced by a note and deed of trust in favor of Pacific Northwest Mortgage, Inc. Seafirst had purportedly executed against the Pacific deed of trust. Because Seafirst was not the owner or holder of the promissory note and never executed against it, we affirm.

On June 15, 1994, Folasa and Veronica Titialii signed a promissory note in the face amount of $141,550 and a deed of trust securing that note. Pacific was the obligee under the note and the beneficiary under the deed of trust. Ford provided the money to fund this loan. Under the terms of an agreement between Ford and Pacific, Ford approved the Titialii's loan application that Pacific submitted and agreed to purchase the loan from Pacific. At closing, Ford funded the loan, and Pacific endorsed and delivered to Ford the original promissory note and other documents.

Pacific also recorded the deed of trust, which was then delivered to Ford.

Hence, the deed of trust bears a notation on its face that it was "filed for record at request of" Ford. The back of the note bears an indorsement reading, "Pay to the order of Ford Consumer Finance Company, Inc. without recourse per agreement dated* ." No one ever recorded an assignment of the deed of trust in favor of Ford.

In October 1994, Seafirst became a judgment creditor of Pacific, as a result of an unlawful detainer action. Approximately three weeks later, under a writ of execution obtained by Seafirst, the King County Sheriff purported to levy against "all of Pacific Northwest Mortgage Services, Inc.'s interest as beneficiary under" the deed of trust on the Titialii property. The sheriff conducted a sale of that interest, and Seafirst purchased it at the execution sale for $800. The sheriff did not purport to levy on the note.

From the time of closing until their refinancing, the Titialiis made their loan payments to Ford. In January 1995, they refinanced their loan with Continental Savings Bank. They notified Continental that they had been making their mortgage payments to Ford. Ford gave payoff figures to Continental. But Seafirst asserted that it was entitled to the payoff funds because the sheriff had sold Pacific's interest in the deed of trust to Seafirst at the sheriff's sale. Because of the conflicting claims, Continental obtained from Seafirst a conditional release and reconveyance of its interest in order to close the refinancing. Ford commenced this action against Seafirst and others, seeking a declaratory judgment that it was entitled to the proceeds. The trial court granted Ford's motion for summary judgment, awarding it the escrowed refinancing proceeds. The court also denied Seafirst's cross-motion for summary judgment seeking the same proceeds. Seafirst appeals.


Standard of Review

When we review an order granting summary judgment, we engage in the same inquiry as the trial court. *fn1 CR 56(c) permits a trial court to grant summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." "All facts and reasonable inferences are considered in the light most favorable to the nonmoving party and all questions of law are reviewed de novo." *fn2 A material fact is one upon which the outcome of the litigation depends. *fn3 Summary judgment is not proper if reasonable minds could draw different Conclusions from undisputed facts or if all of the facts necessary to determine the issues are not present. *fn4


Ownership of the Note

Seafirst claims that the trial court erred by granting summary judgment because Seafirst had acquired Pacific's interest in the deed of trust securing the note at the execution sale. But Ford, not Seafirst, is the owner and holder of the promissory note. Ford is therefore ...

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